Stocks Turn Around in Final Hours of Trading to End Week on High Note

During the overnight trading session, the S&P 500 futures encountered difficulty in surpassing the psychological threshold of 4,000. The 21-day Exponential Moving Average (EMA) at 3,987 also presented a formidable obstacle, leading to a rejection of these crucial levels and a shift in market sentiment towards bearishness during pre-market hours. Following the failure to breach the 21-day EMA, the market experienced a 40-point decline, eventually testing the 200-day Simple Moving Average (SMA), which held significant importance due to the high volume of trading activity in that area during the previous session.

This level of trading activity was immediately identified as an area of interest when heavy volume flooded the market at the end of the previous session. One reason for the heightened importance of this level is due to the presence of large institutional investors on Wall Street. A breach of the 3,950 level could potentially trigger panic among these prominent institutions, resulting in a significant downward move. However, there remains the possibility that this area on the chart could be held up once again, allowing institutions to continue to inject liquidity at their desired entry points.

Bell Sounds, Liquidity gets Found

Upon the sounding of the opening bell, the trading session commenced with a volatile and erratic market, characterized by significant fluctuations between 3,950 and 3,965. The market appeared to be in search of a clear direction, which would pave the way for a more significant move. Upon testing the 3,950 level, buying volume was observed and continued to accumulate, signaling a potential move higher across the board. Following a sharp decline and the final retest of the 3,950 level, the market finally set a trap, which led to a rapid ascent towards the day’s high.

As the market approached the day’s high, it faced significant resistance in breaking through the 21-day Exponential Moving Average (EMA). However, sustained buying pressure eventually enabled the market to surpass this level, setting the stage for the next target above, which was the 4,000 level. A brief consolidation above the 21-day EMA occurred before the market broke through the 4,000 level.

Events Next Week

Looking ahead to next week, the economic calendar appears to be relatively light. U.S. Consumer Confidence data will be released on Tuesday at 10 a.m. Eastern time. The weekly Jobless Claims report will be published on Thursday at 8:30 a.m. In addition, Boston Federal Reserve (Fed) President Collins is scheduled to deliver a speech at 12:45 p.m. that same day. The most significant event of the week will likely be the release of the Personal Consumption Expenditures (PCE) report on Friday at 8:30 a.m. Eastern time. Later in the session, the Chicago Business Barometer and the Consumer Sentiment will also be included.

Late Rip Causes Market to Go Green

During the previous session, a late rally pushed the Nasdaq and S&P 500 indices into positive territory, with the S&P 500 futures closing up 0.77%, gaining 30 points, while the Nasdaq futures rose by 0.47%, gaining 64 points. The Dow Jones futures also followed suit, closing up 0.45%, adding an additional 148 points.